Transurban looks for major stake in QML

TOLL road operator Transurban says it will take a substantial stake if it and its consortium partners bid for Queensland Motorways Ltd (QML).

"Clearly, for us to be involved it would have to a very meaningful stake for us," Transurban chief executive Scott Charlton told reporters on Thursday.

"It will be a substantial stake without making anything more public than that."

The state-owned Queensland Investment Corp (QIC) is selling QML, which operates a 70km network of tolled roads, bridges and infrastructure in Brisbane, including the Go Between Bridge, CLEM7, Gateway, Gateway Extension and Logan motorways.

Transurban and Australian Super are anchoring one of the consortia considering a bid for QML.

Mr Charlton said QML was a strategic asset which has a lot of components that were complementary to the way in which Transurban operates its existing Australian assets in Melbourne and Sydney.

"We could bring a lot of benefits, we think, to the city of Brisbane and the state of Queensland in how we operate our traffic planning, tolling, forecasting and everything we do," he said.

The Australian Competition and Consumer Commission (ACCC) on Wednesday invited submissions regarding the Transurban consortium's proposed acquisition of QML.

Mr Charlton also said on Thursday that Transurban had been nominated as preferred bidder for Sydney's Cross City tunnel by the receiver.

The receiver's sale process is expected to finish in the first half of 2014, and the outcome will determine Transurban's future ownership interest.

Transurban on Thursday reported a profit of $81 million for the six months to December 31, up from $80.9 million a year ago.

Revenue from tolls rose more than 13 per cent to $498 million.

The completion of the Hills M2 upgrade in northern Sydney on July 31, 2013 was the main contributor to the strong growth in toll revenue.

The M2 upgrade contributed to traffic growth on the adjoining Westlink M7 and Lane Cove Tunnel.

Transurban has increased its distribution guidance to 35 cents for the full financial year, up from the original guidance of 34 cents.

It also holds a 75 per cent stake in Sydney's M1 Eastern Distributor, and a 50 per cent stake in the Westlink M7 and the M5.

In the US, Transurban holds a 75 per cent stake in the Pocahontas 895 in Virginia and a 67.5 stake in the 495 Express Lanes, also in Virginia.

Transurban is in the process of transferring the Pocahontas 895 to the lenders to the asset.

Transurban said traffic and revenue on the 495 Express Lanes, which is part of a road network surrounding Washington DC, remained below initial expectations and a review had resulted in downward adjustments to traffic and revenue projections.